Utah's Herbert thanks feds for health exchange split

Guv grateful Utah can serve small business and let feds handle individual mandate.

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Washington • Utah Gov. Gary Herbert expressed his gratitude Friday to federal officials who agreed to split the responsibilities for offering insurance through health care exchanges, and he suggested other states may want to follow this new Utah model.

The deal, which the Department of Health and Human Services agreed to Friday, allows the state to operate its small-business exchange, known as AveÂ­nue H, while avoiding some of the more politically contentious portions of the Affordable Care Act.

Namely, Herbert and the Republican-controlled state Legislature wanted nothing to do with the individual mandate, a federal requirement that most people have insurance or pay a fine.

HHS agreed to run a separate exchange, offering insurance to individuals. It also would provide premium subsidies and screen people for eligibility for low-income health care programs like Medicaid and CHIP.

"We'll do the small-business side, the federal government will do the individual mandate and we won't compete with each other in that responsibility," Herbert said in a 10-minute conference call with reporters, where he did not take any questions. "They have granted us everything that we asked for, and for that I'm grateful."

Herbert thanked HHS Secretary Kathleen Sebelius for negotiating the unique model. Every other state has either agreed to run an individual and small-business exchange, allowed the federal government to do it or run one in tandem with the feds.

"After careful review we are granting this flexibility," HHS spokesman Fabien Levy said. "We will continue to work with Utah, and all states, to ensure all consumers have access to quality, affordable health coverage."

Herbert suggested that other states might find some benefit in running two separate programs and in a letter agreeing to the deal, Gary Cohen, director of the Center for Consumer Information and Insurance Oversight at HHS, said that's a possibility.

Cohen wrote that state and federal negotiators held a series of negotiations working "toward a solution that would meet our shared goal of providing high-quality, affordable health insurance options to Utahns."

He also noted that Utah could decide in future years to expand its exchange to the individual market as long as it complied with the Affordable Care Act's mandates.

That's tough to envision at this point, when the Republican Party remains staunchly opposed to the federal health law passed under President Barack Obama.

The U.S. House plans to hold another vote on repealing the health care law in the coming week  there have been more than 30  while Obama is holding events touting the law.

The reason for the flurry of activity in states and in Washington is that these exchanges must be up and running by Oct. 1, the start of the open-enrollment period.

That's when Utah's 400,000 uninsured residents will have the chance and the responsibility for seeking coverage.

HHS will fund a "navigator" program, which will help people obtain coverage through the individual exchange, as part of the deal; Utah will fund two navigators focused on pitching Avenue H to businesses with 50 employees or fewer.

Herbert emphasized the federal exchange won't compete with the Utah exchange, but in an interview with The Salt Lake Tribune in February he acknowledged the bifurcated approach may lead some small-business leaders to drop coverage and send employees to the federal individual market where they could get taxpayer-funded subsidies.

"There's no question that when you offer people subsidies that there's a tendency to gravitate in that direction," he said. "Businesses will end up saying 'You know what? Why have the hassle? Just let these folks go to the individual marketplace and I'll save money.' "

But the governor is convinced the agreement will allow Utah's health reforms to survive and thrive.

"This gives us the chance to move ahead and see what the potential for our exchange is going to be," he said.

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